Tribunal File Number: 16-000075/AABS
Case Name: 16-000075 v Wawanesa Mutual Insurance Company
In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8, in relation to statutory accident benefits.
Between:
M. M.
Applicant
and
Wawanesa Mutual Insurance Company
Respondent
DECISION ON COSTS
Adjudicator: Sandeep Johal
APPEARANCES:
Applicant: Did Not Appear
Counsel for the Respondent: Kathleen O’Hara, Counsel and Vagmi Patel, Student-at-Law
Heard in-person on: February 10, 2017
OVERVIEW:
The applicant was injured in an automobile accident on November 21, 2015 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the ''Schedule'').
The applicant submitted an application for dispute resolution services to the Licence Appeal Tribunal - Automobile Accident Benefits Service (AABS) (the “Tribunal”).
The applicant sent a Notice of Withdrawal to the Tribunal on the morning of July 20, 2016, prior to the beginning of the scheduled case conference of the same date.
On July 20, 2016, all parties except the applicant called in for the scheduled case conference. The applicant’s counsel advised that they had sent in the Notice of Withdrawal.
The respondent made a request for costs and was advised to provide written submissions on costs by July 29, 2016.
On July 21, 2016 the Tribunal received a notice of withdrawal of representation by applicant’s counsel, Laraia/Nterekas, Professional Corporation.
On December 5, 2016 a notice of motion was filed by the respondent seeking costs against the applicant.
The Tribunal sent a notice to the parties advising of an in-person hearing scheduled for February 10, 2017 for the costs motion.
The respondent sent their submissions and evidence to the applicant by courier and regular mail.
ISSUE TO BE DECIDED
- Is the respondent entitled to recover costs pursuant to Rule 19.1 of the Licence Appeal Tribunal Rules of Practice and Procedure (the “Rules”)?
RESULT
- Based on the totality of the evidence before me, I find that the respondent is not entitled to recover costs pursuant to Rule 19.1 of the Rules.
THE LAW
The Tribunal’s authority to award costs comes from two sources:
Section 17.1 of the Statutory Powers and Procedure Act (“SPPA”); and Rule 19.1 of the Rules
Section 17.1(1) of the SPPA empowers the Tribunal to order a party to pay another party’s costs in a proceeding according to rules made under s. 17.1(4). Section 17.1(2) states the Tribunal shall not order a party to pay costs unless the conduct or course of conduct of that party has been unreasonable, frivolous or vexatious, or has acted in bad faith.
Rule 19.1 of the Rules mirrors the language of s. 17.1(2) of the SPPA, and provides that a party may make a request to the Tribunal for its costs where a party believes that another party in a proceeding has acted unreasonably, frivolously, vexatiously or in bad faith.
Prior to April 1, 2016, under s. 282 (11) of the Insurance Act (“Act”), an arbitrator’s jurisdiction and discretion to award costs was broad. Unlike Rule 19.1, arbitrators at the Financial Services Commission Ontario (“FSCO”) could consider criteria other than vexatious, unreasonable, frivolous and bad faith behaviour of a party, such as a party’s degree of success in the outcome of the proceeding, the conduct of a party, or a party’s representative, the failure of a party to comply with undertakings or orders, any written offers to settle, and/or any aspect that was improper, vexatious or unnecessary.1
Section 281 (11) of the Act was repealed on April 1, 2016. The Tribunal’s opinion is that the repeal of s. 281 (11) is a clear statement of legislature’s intent to limit the circumstances where the Tribunal can award costs in a proceeding. However, the repeal of s 281 (11) does not prevent parties from negotiating costs and disbursements between themselves as they settle files.
ANALYSIS
The respondent submitted documentary evidence and submissions. The applicant did not attend the hearing and did not submit any evidence or provide submissions, despite notice being provided. I have considered all the evidence and submissions made.
The respondent submits that the applicant acted frivolously, vexatiously and in bad faith by filing an appeal application with the Tribunal for income replacement benefits while he was employed by another employer, which was not disclosed to the respondent.
The only